A growth-oriented method to coming into the general public market
While an IPO is usually reserved for companies with sales exceeding £ 100 million or more, small and medium-sized businesses can also benefit from going public. “It’s a great opportunity for UK SMEs to think about accessing capital in the public markets without being the prime market size,” said Patrick Birley, CEO of NEX Exchange. “F.For SMBs looking to dip their toes in a public market for the first time, NEX Exchange provides an inexpensive and easy way to achieve public market status. “
Removing barriers for SMEs
NEX Exchange is an independent UK exchange regulated by the Financial Services Authority that focuses on smaller companies. This means the rules and requirements for allowing a company to trade are far less complicated and burdensome than they are for AIM, says Birley.
Unlike other junior stock markets like AIM, the cost of joining NEX Exchange is significantly lower and can be drawn from the funds a company raised at the time it was admitted to the market. The typical approval process takes around three months.
“The most obvious benefit of joining NEX Exchange is a greater chance of raising stock-based funding if you are an early stage company. Around 80 percent of the funds raised by companies on the market to date have been used to finance growth rather than for the initial start-up. That says it all, ”adds Birley.
Every company is different, but on average, Birley estimates that a company with a market cap of £ 10 million to £ 20 million would have to spend between £ 75,000 and £ 100,000 to get into the market, which he believes is around 25 percent of the cost on AIM hover.
“So many companies have to raise money to pay the cost of entering the market. It’s a real barrier for early-stage businesses. At lower cost, employees can get on board much earlier and prepare well for real growth, ”he adds.
Create a basis for further growth
Joining NEX Exchange provides an independent valuation for your business, and companies in the market can potentially use their stocks as currency for acquisitions. Additionally, your company’s shareholders, from founders to stock investors, can better realize the value of their investment through a regulated market for the company’s stocks.
“We are an exchange that is part of a community at the center. Whether brokers, investors or issuers, we are all trying to achieve the same goal, ”says Birley. Traditional exchanges focus on liquidity and trading volume. They have systems in place for high-frequency trading, and the cost of doing this is completely disproportionate for customers who are early stage businesses, he adds.
“The broker community connects with market makers in a very simple, low-tech environment. These are growth companies. They don’t trade 20 times a second and this is why we’re almost insane in our approach because these companies have to be careful about overspending. “
In terms of employee motivation and retention, companies joining NEX Exchange can set up transparent employee stock ownership programs that can motivate and motivate employees early on on the path to growth.
NEX Exchange is generally ideal for companies looking to raise less than £ 5M, although there are no restrictions on the type of company, industry, or size of companies that can join. Birley believes that the platform’s ambitions as a stand-alone, fast-growing organization mirror those of issuers on the exchange. “The exchange model doesn’t have to be too difficult. We connect issuers with investors in the simplest and clearest way by reducing the friction costs of the two meetings, ”added Birley.
NEX Exchange itself works like a well-oiled machine, and as Birley explains, the model can afford to be lean and agile with 85 companies currently public. “Ultimately, we’re trying to restore an old-style coffee house exchange with simple rules and everyone is a part of it. Just like the issuers on the NEX Exchange, we are ambitious and excited about the future. “